An agreement that provides financial assistance to students in perpetuity. The core principal is invested, and a portion of the earnings from that investment are used to fund scholarships. This ensures ongoing support for students. For example, a donor might establish a fund with a specific amount, stipulating that the annual earnings above a certain percentage are awarded as financial aid to students studying engineering.
The importance of this mechanism lies in its long-term sustainability and impact. It creates opportunities for students who may lack the financial means to pursue higher education. The funds contribute to institutional stability, enabling schools to attract talented individuals and enhance academic programs. Historically, these have played a crucial role in democratizing education and fostering innovation within academic institutions.
